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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 25, 1997
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SEARCH FINANCIAL SERVICES INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-9539 41-1356819
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(State or other jurisdiction (Commission File (I.R.S. Employer
jurisdiction of incorporation) Number) Identification No.)
600 N. PEARL STREET
SUITE 2500
DALLAS, TEXAS 75201-2899
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 965-6000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On June 25, 1997, Registrant entered into a letter agreement with MS
Financial, Inc. (the "Amendment") amending the Agreement and Plan of Merger
(the "Merger Agreement") dated as of February 7, 1997 by and among Registrant,
Search Capital Acquisition Corp. and MS Financial, Inc. ("MS") pursuant to
which a wholly-owned subsidiary of Registrant will merge into MS (the
"Merger"), resulting in MS becoming a wholly-owned subsidiary of Registrant. In
the Merger, each outstanding share of common stock of MS will be converted at
the effective time of the Merger into the right to receive a fraction (the
"Exchange Ratio") of a share of common stock of Registrant determined by
reference to the average price per share of the common stock of Registrant for
the 10 day-trading period ending on the fifth business day prior to the special
meeting of stockholders of MS at which the Merger Agreement will be considered
for adoption (the "Average Trading Price"). Pursuant to the Amendment, the
Exchange Ratio will equal $1.63 (the "Per Share Amount") divided by the Average
Trading Price, subject to a maximum of .37 and a minimum of .28. The price
adjustment provisions of the Merger Agreement have been deleted.
The Merger is expected to be consummated promptly following receipt of
stockholder approval expected in late July and the satisfaction of other
customary closing conditions, including finalization of arrangements with MS'
lenders. Approval of the Merger by MS' stockholders requires the affirmative
vote of a majority of the outstanding shares of common stock of MS. Pursuant to
a Stockholders Agreement dated as of February 7, 1997 (the "Stockholders
Agreement"), MS' principal stockholders, which together own approximately 77%
of MS' outstanding common stock, have agreed to vote their shares in favor of
the Merger.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(C) EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Letter Agreement dated June 25, 1997 by and among Search
Financial Services Inc., Search Capital Acquisition Corp.
and MS Financial, Inc.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SEARCH FINANCIAL SERVICES INC.
By: /s/ Ellis A. Regenbogen
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Ellis A. Regenbogen
Executive Vice President
Dated: July 9, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Letter Agreement dated June 25, 1997 by and among Search
Financial Services Inc., Search Capital Acquisition Corp.
and MS Financial, Inc.
</TABLE>
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June 25, 1997
MS Financial, Inc.
700 S. Pear Orchard Road
Ridgeland, MS 39157
Gentlemen:
This letter confirms our agreement that the Agreement and Plan of
Merger by and among us dated as of February 7, 1997 (the "Merger Agreement") is
amended as follows:
1. Sections 1.2 (g) and (h) of the Merger Agreement and all
references to Sections 1.2 (g) and (h) in the Merger Agreement are
deleted;
2. Section 1.2 (d) of the Merger Agreement is amended to read in
its entirety as follow:
"(d) Maximum and Minimum Exchange Ratio. Notwithstanding the
provisions of Section 1.2 (c) above and except for any adjustment made
pursuant to Section 1.2 (e), in no event will the Exchange Ratio exceed
.37 or be less than 0.28."
3. Sections 2.2 (f), 8.2, 8.3, 8.4, 8.5, 8.6, 8.10, 8.37, 8.61 and
8.70 of the Merger Agreement are deleted;
4. Section 7.1 (b) of the Merger Agreement is amended by changing
the date referenced therein from "June 30, 1997" to "August 15, 1997";
and
5. Section 8.77 of the Merger Agreement is amended to read in its
entirety as follows:
"8.77. "Per Share Amount" means $1.63, or such amount adjusted
pursuant to Section 1.2 (e) if such an adjustment is to be made."
Please acknowledge your agreement to the foregoing by signing this
letter in the space provided below.
Sincerely,
SEARCH FINANCIAL SERVICES INC.
By: /s/ GEORGE C. EVANS
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George C. Evans
Chairman of the Board and
Chief Executive Officer
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Letter: MS Financial, Inc.
June 25, 1997
Page 2
SEARCH CAPITAL ACQUISITION CORP.
By: /s/ ROBERT D. IDZI
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Robert D. Idzi
Senior Executive Vice President
Agreed:
MS FINANCIAL, INC.
By: /s/ JAMES B. STUART, JR.
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James B. Stuart, Jr., Chairman
The undersigned acknowledge (1) their agreement to the foregoing
amendments to the Merger Agreement (the "Amendment"), (2) that the Stockholders
Agreement dated as of February 7, 1997 by and among Search Financial Services,
Inc. and the undersigned (the "Stockholders Agreement") remains in full force
and effect and (3) that all references in the Stockholders Agreement to the
Merger Agreement shall be to the Merger Agreement as amended by the Amendment.
MS FINANCIAL SERVICES, INC.
By: /s/ JAMES B. STUART, JR.
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James B. Stuart, Jr.
MS DIVERSIFIED CORPORATION
By: /s/ JAMES B. STUART, JR.
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James B. Stuart, Jr., President
GOLDER, THOMA, CRESSY, RAUNER
FUND IV, L.P.
By: GTCR IV, L.P., its General Partner
By: Golder, Thoma, Cressy, Rauner,
Inc., its General Partner
By: /s/ DONALD J. EDWARDS
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Donald J. Edwards
Its: Principal
